A bit of candor: I’d really like to like Elizabeth Warren’s plans. Seriously.
First, as a general rule, politicians who propose meaningful change should get specific enough about their idea so that voters can have a good look before they go to the polls. So Warren is setting a good example on this front and likely raising the bar for other Democratic party aspirants.
Second, I want to make sure I’m not falling prey to the cognitive bias called the halo effect, which is a tendency to see people as all good or all bad. So I want to make sure my reaction to the neoliberal frogs that sometimes hop out of Warren’s mouth doesn’t taint my reading of her generally. For instance, her private equity plan is very strong, particularly her sweeping ideas about how to make private equity firm principals liable when they bankrupt companies. But as America’s top bankruptcy scholar, the core of that plan falls in an area where she has unparalleled expertise.
But generally, Warren’s change programs have a frequent shortcoming: they do a great job of assessing the challenge but then propose remedies that fall well short of remedying them. As Matt Yglesias pointed out in January:
If Two-Income Trap were released today, I’d say it suffers from a striking mismatch between the scale of the problem it identifies and the relatively modest solutions it proposes. Tougher regulation of consumer lending would be welcome but obviously would not fundamentally address the underlying stagnation of income.
On top of that, Warren’s “I have a plan” mantra sounds an awful lot like a dog whistle to Clinton voters. And even though I’ve only given a good look at two of her plans so far ex her private equity plan, there’s a lot not to like in both of them. We covered her wealth plan earlier, and didn’t treat Sanders’ at the same time because hers was sucking up all the media attention even though Sanders had proposed a wealth tax years before she did. That was a mistake. Sanders’ wealth tax plan is better than Warren’s.
Even though Sanders plan has the same fundamental problem, that of not recognizing how the IRS in recent decades has never won a large estate tax case where you have the same valuation issues with a wealth tax, Sanders proposes a more aggressive beef up of the IRS than Warren does, so he may have a sense of the severity of the enforcement problem and also provides for some legal fallbacks regarding valuation. He also realistically does not depict his tax as a global wealth tax, since there’s no way to get the needed information or cooperation on foreign holdings that aren’t in bank or brokerage firms.
But even more important, both Warren and Sanders wealth tax schemes rely on the work of economists Emmanuel Saez and Gabriel Zucman in devising their taxes and estimating how much they’d yield. The structure of Sanders’ tax hews to their recommendations as to how to maximize revenues and cut into inequality. Warren’s does not. So contrary to popular perceptions, Sanders’ wealth tax plan should get higher wonk points than Warren’s.
So on to the next Warren plan.
Warren’s Excess Lobbying Tax
Warren presented her Excessive Lobbying Tax. The problem it is meant to solve is not just lobbying as currently defined, which is the petitioning of member of Congress to influence legislation. Warren is out to tackle not just that but also what she depicts as undue corporate influence in the regulatory process:
But corporate lobbyists don’t just swarm Congress. They also target our federal departments like the Environmental Protection Agency and the Consumer Financial Protection Bureau….
Regulatory agencies are only empowered to implement public interest rules under authority granted by legislation already passed by Congress. So how is it that lobbyists are able to kill, weaken, or delay so many important efforts to implement the law?
Often they accomplish this goal by launching an all out assault on the process of writing new rules — informally meeting with federal agencies to push for favorable treatment, burying those agencies in detailed industry comments during the notice-and-comment rulemaking process, and pressuring members of Congress to join their efforts to lobby against the rule.
If the rule moves forward anyway, they’ll argue to an obscure federal agency tasked with weighing the costs and benefits of agency rules that the rules are too costly, and if the regulation somehow survives this onslaught, they’ll hire fancy lawyers to challenge it in court.
Before we get to Warren’s remedies, there are some odd things about the problem statement. One is that she fails to acknowledge that regulatory rulemaking devises more specific policies in order to implement legislation. That reflects the fact that legislation often isn’t detailed enough to provide a definitive guide to agencies. And the public is entitled to weigh in on rulemaking. So what she is objecting to is that corporate interests are able to overwhelm the comment process. Second is that there is a significant abuse that she fails to mention, that some proposed rule changes, such as regarding net neutrality, where ordinary citizens weighed in heavily, saw comments on the other side that were submitted by bots, overwhelming the agency. The bot abuse is specific and important, and it’s odd to see Warren leave it by the wayside.
Warren’s plan has three main prongs. First, she would make pretty much anyone who as part of their employment seeks to influence Federal legislation or regulation register as a lobbyist. They would be require to make public who they’d been lobbying and what information they provided (an interesting question here as to what gets reported from in person discussions).
Second, she would require that “every corporation and trade organization” with over $500,000 per year in lobbying expenditures is subject to an “excess lobbying tax”. Spending of $500,000 to $1 million would be taxed at a 35% rate, over $1 million, at a 60% rate, and over $5 million, 75%.
Warren states that her tax would have raised $10 billion in the last ten years and she intends to use that for the third major leg of her programs, which is various anti-lobbyist initiatives. She plans to spend the revenues on
A “Lobbying Defense Trust Fund” to bolster “Congressional independence from lobbyists” by providing more money to Congressional support bodies like the CBO
Extra funding to agencies that are on the receiving of lobbying. When an entity in the $500,000 or higher lobbying spending bracket, the agency gets a special allocation “to help it fight back”.
An Office of the Public Advocate to help ordinary citizens get better representation in the lobbying process
She also asserts that her plan will also “shut the revolving door between government and K Street” but she offers no mechanism to provide for that. So that is a handwave.
The Conceptual Flaws in Warren’s Approach
It’s hard to know how much of this Warren believes and how much of this was dreamed up by her staffers (the document is signed “Team Warren).
Taxation is the wrong approach. Even though Warren discusses how much money her tax would raise, her strident disapproval of lobbying and the punitive tax levels make clear that the purpose of the tax is to discourage lobbying. But if lobbying is as bad as Warren believes it is, she should instead be prohibiting abuses, like comments by bots. In the 1970s, economist Martin Weitzman came up with an approach to determine when taxation was the right way to discourage problematic behavior, as opposed to barring it. A summary from the Bank of England’s celebrated economist Andrew Haldane:
In making these choices, economists have often drawn on Martin Weitzman’s classic public goods framework from the early 1970s. Under this framework, the optimal amount of pollution control is found by equating the marginal social benefits of pollution-control and the marginal private costs of this control. With no uncertainty about either costs or benefits, a policymaker would be indifferent between taxation and restrictions when striking this cost/benefit balance.
In the real world, there is considerable uncertainty about both costs and benefits. Weitzman’s framework tells us how to choose between pollution-control instruments in this setting. If the marginal social benefits foregone of the wrong choice are large, relative to the private costs incurred, then quantitative restrictions are optimal. Why? Because fixing quantities to achieve pollution control, while letting prices vary, does not have large private costs. When the marginal social benefit curve is steeper than the marginal private cost curve, restrictions dominate.
The results flip when the marginal cost/benefit trade-offs are reversed. If the private costs of the wrong choice are high, relative to the social benefits foregone, fixing these costs through taxation is likely to deliver the better welfare outcome. When the marginal social benefit curve is flatter than the marginal private cost curve, taxation dominates. So the choice of taxation versus prohibition in controlling pollution is ultimately an empirical issue.
Moreover, the tax would hit all lobbyists. Who do you think has the better odds of raising more money to offset the tax and carrying on as before: Public Citizen or the Chamber of Commerce?
By contrast, one idea of ours that could have helpful chilling effects would be to go much much further than merely requiring all lobbyists, broadly defined, to register and also require them to provide reports on what government officials they contacted/met with and what information they provided them.
We’d also make these lobbyists subject to FOIA and provide stringent standards that apply only to lobbyists, such as:
Set strict and tight time limits for responses (California requires that an initial determination be made in 10 days, for instance)
Require judges to award legal fees and costs to parties who successfully sue over FOIAs where the records were withheld. Provide for awards in cases where the defendant coughs up records as the result of a suit being filed. Set punitive damages for abuses (such as excessive delay, bad faith responses). Strictly limit invocation of attorney/client privilege to demonstrable litigation risks
Letting journalists and members of the public root around in the discussion between various think tanks and their business allies would regularly unearth material that would be embarrassing to the parties involved. It would go a long way toward denting the perceived legitimacy of lobbying, which over time would strengthen the immune systems of the recipients.
Warren assumes that most people in Congress and at regulators are anti-corporate but are overwhelmed by lobbyists. First, the piece presents a Manichean world view of evil greedy corporate interests versus noble underrepresented little people. And while this is very often true, it’s not as absolute as Warren suggests. The companies are often have conflicting interests, which can allow for public-minded groups to ally with the corporate types who are on their side on particular matters.
A second part of the Manichean take is the notion that the agencies aren’t on board with the corporate perspective. Unfortunately, reality is vastly more complicated. For instance, banking regulators are concerned overall with the safety and soundness of the institutions they oversee. They aren’t in the business of consumer advocacy or consumer protection save as required by legislation. The concern with safety and soundness perversely means that they want the institutions they oversee to be profitable so as to help assure capital adequacy and to attract “talent” to make sure the place is run adequately. (We’ve stated repeatedly we disagree with this notion; banks are so heavily subsidized that they should not be seen as private businesses and should be regulated as utilities). For instance, in the late 1980s, McKinsey was heavily touting the idea of a coming bank profit squeeze. McKinsey partner Lowell Bryan in his 1992 book Bankrupt spoke with pride at how his message was being received, and in particular, that regulators were embracing deregulation as a way to bolster bank incomes.
Another complicating factor is that in certain key posts, industry expertise and therefore an insider status is seen as key to performing the job. For instance, it’s accepted that the Treasury Secretary should come from Wall Street so he can talk to Mr. Market. Of all people, GW Bush defied that practice, appointing corporate CEOs as Treasury Secretary. The position wound up being a revolving door in his Administration as his appointees flamed out. Finding a modern Joe Kennedy, someone who knows sharp industry practices and decides to go against incumbents, is a tall order.
Similarly, agencies have career staffers and political appointees at a senior level. That included critical roles like the head of enforcement at the SEC. If Republicans or pro-corporate Democrats control the Administration and the Senate, business-friendly appointees will go into these critical posts. The optics may be better with the Democrats, but the outcome isn’t that much different. As Lambert likes to say, “Republicans tell you they will knife you in the face. Democrats tell you they are so much nicer, they only want one kidney. What they don’t tell you is next year they are coming for your other kidney.”
So Warren is also implicitly selling the idea of Team Dem as anti-corporate vigilantes, a fact not in evidence.
And speaking of kidneys…a letter from a departing SEC career employee and Goldman whistleblower, James Kidney, shows how even staffers who want to do the right thing have their perspective warped over time. As we said about his missive, which you can read in full:
Two things struck me about Jim Kidney’s article below. One is that he still wants to think well of his former SEC colleagues…
Number two, and related, are the class assumptions at work. The SEC does not want to see securities professionals at anything other than bucket shops as bad people. At SEC conferences, agency officials are virtually apologetic and regularly say, “We know you are honest people who want to do the right thing.” Please tell me where else in law enforcement is that the underlying belief.
So it also seems unlikely that there is a cadre of vigorous regulators just waiting to be unshackled by the likes of Warren and her anti-lobbyist funding. The way institutions change is by changing the leadership and enough of the worker bees to send the message that the old way of doing things isn’t on any more. That does not happen quickly. And absent a system breakdown like the Great Depression, staff incumbents know that talks of new sheriffs in town may not last beyond the next election cycle.
And the experience of Warren’s hand picks at her own pet agency shows that they were all too willing to let corporations set the agenda. Recall that Warren recommended that Richard Cordray, head of the CFPB when it became clear she would not get the job, and Raj Date, the first deputy director of the CFPB, was also an ally of hers. From our 2012 post, Consumer Financial Protection Bureau Launches “Make Life Easier for Lobbyists” Tool:
I’m pretty gobsmacked by the link (hat tip reader Scott S) to a webpage at the Consumer Financial Protection Bureau which says it is written by Richard Cordray: “We want to make it easier for you to submit comments on streamlining regulations.”
There is more than a little bit of NewSpeak in this idea. “Streamlining regulations” is generally right wing code for “eliminating/relaxing regulations.” Admittedly, Elizabeth Warren during her brief time as de facto head of the nascent CFPB, proposed and launched a project to simplify mortgage disclosure forms to combine two required forms into one and make them easier to understand….
However, this opening of the door by Cordray does not look as likely to produce such happy outcomes. Maybe this is a means for the CFPB to force lobbyists to provide their input in a format that makes it easier for CFPB to process. But I can’t imagine that Cordray or Raj Date would say to the American Bankers Association: “We are trying to create a level playing field, so we won’t meet with you. Put it in writing and we’ll give it due consideration.”
So if this portal is a supplemental channel, who exactly is it intended to serve? The dropdown menu on the “Tell Us About Yourself” page tells us who it expects to comment: people from organizations, specifically:
Financial services provider
In other words, it does not contemplate that consumers have the expertise or motivation to provide input. Citizens are probably assumed to be represented via the CFPB itself or perhaps also by consumer groups, but even then, they may have specific axes to grind (think the AARP).
With friends like this, who needs enemies? Date, a former McKinsey partner and Capital One executive when he joined the CFPB, was singled out in a 2013 article in The Hill on how he was among the recent departures that showed the revolving door was active at the agency.
More generally, this is another example of attacking the problem at the wrong level. The reason there is so much corruption in Washington is that the pay gap between what people can make at senior levels at regulators versus what they can make in the private sector is so enormous. And pay matters more than ever given the cost of housing, private schools, and college. Singapore’s approach was designed explicitly to prevent corruption in government: pay top-level bureaucrats at the same level as top private sector professional (think law firm partners) and have tough and independent internal audit. We are a long long way from embracing any system like that, but it’s important to recognize what the real issues are.
Lobbyist “tax” walks and quacks like an attack on free speech and the right to petition the government. Even worse, she makes it easy to attack her program in court with this section and similar observations in her piece:
In the first four months, the DOL received hundreds of comments on the proposed [fiducairy] rule, including comments from the U.S. Chamber of Commerce, Morgan Stanley, Bank of America, BlackRock, and other powerful financial interests. After a public hearing with testimony from groups like Fidelity and J.P Morgan, the agency received over 100 more comments — including dozens from members of Congress, many of which were heavily slanted toward industry talking points. Because the law requires agencies to respond to each concern laid out in the public comments, when corporate interests flood agencies with comments, the process often becomes so time-consuming and resource-intensive that it can kill or delay final rules altogether — and that’s exactly what happened.
Warren is depicting the act of making public comments as an abuse. And her clear intent is to reduce corporate input. This particular bit is very problematic: “….many of which were heavily slanted toward industry talking points.” Was she objecting to the fact that a lot of the submissions were highly parallel, and therefore redundant, designed to choke the pipeline…or simply that they presented familiar pro-business tropes and were low value added? Not being well crafted is not a basis for rejecting a public comment.
Warren sets herself for a legal challenge to her idea with this bit: “..if the regulation somehow survives this onslaught, they’ll hire fancy lawyers to challenge it in court,” and she later criticizes opponents of the fiduciary rule:
Today, the Department of Labor is led by Eugene Scalia, the very corporate lawyer and ex-lobbyist who brought the lawsuit to kill off the proposal.
Was Warren missing in action in civics class when they presented the fact that Presidents make appointments subject to the advice and consent of the Senate? And what would she do about future Eugene Scalias? She is intimating that he shouldn’t have been allowed to serve, but that’s the call of the Senate, not hers.
But more important, Warren makes it clear that she is so opposed to undue corporate influence that she objects to judicial review. Help me. Philosophically, the US system allows even the devil to have the benefit of law. But apparently not former law professor Elizabeth Warren.
Again, the problem of ordinary people and pro-consumer organizations being outmatched in court isn’t going to be solved by treating use of the legal process as illegitimate. The idea in her scheme that struck me as the most promising was the idea of an Office of the Public Advocate. If I were in charge, I’d throw tons of money at it, including for litigation.
The Practical Flaws in Warren’s Approach
Since this post is already long, we’ll address these issues briefly. The IRS is a weak agency that loses cases against corporate American all the time. A colleague recently confirmed that take with an insider story on enforcement matters. The short version is that the IRS was unable even to pursue issues only of moderate complexity. The problem isn’t just expertise but apparently also poor internal communication and coordination.
Tax avoidance is completely legal. If you don’t think some of the targets of Warren’s tax would find ways to restructure their operations so as to greatly reduce their tax burdens, I have a bridge I’d like to sell you. And they’d probably do it not so much to reduce taxes (“We need more donations due to meanie Warren” would be a powerful fundraising cry and a lot of the heavyweight groups and big corporations that lobby directly wouldn’t miss a stride) as to avoid funding her anti-lobbying initiatives.
And who would be least able to reorganize their lives to reduce the tax hit? The smaller public advocates, natch.
It could be that I’ve simply hit upon two of Warren’s weakest plans. But I have a sneaking suspicion not. A contact who is an expert on political spending gave a big thumbs down to her campaign reform proposal. The spectacle of Warren, whose Congressional staffers would regularly turn out pointed, well-argued, very well supported requests for information from officials that showed her to be operating way way above legislative norms, publishing plans that score high on formatting and saber rattling and low on policy plumbing is a bad sign.
The most charitable interpretation is that Warren has weak people on this part of her campaign and either doesn’t know or doesn’t care. But Warren historically has also show herself to be an accomplished administrator. Is she more over her head than the press has figured out?
Just an excellent critique. My view of Warren’s plans was rather shallow and limited. I could not find any flaws in your assessment. One might think that a senator would have a better grasp of how DC works – or at least human nature.
Maybe, just maybe, it works better to get donors if you do not “see” how DC works. All the better to eat you with, my dear!
“Warren’s change programs have a frequent shortcoming: they do a great job of assessing the challenge but then propose remedies that fall well short of remedying them.”
This approach would dovetail with Warren’s own strategy of liberal-in-lefty’s clothing: decry the problem in angry terms, a la Bernie, and offer more-or-less conventional solutions. Expect a sharp turn to the center if, somehow, she captures the nomination.
I hadn’t realized that the goal of Elizabeth Warren’s lobbying plan was to dramatically shrink the lobbying sector through constitutionally suspect methods limiting speech. Much better if non-profits and Congressional offices were given access to funds to hire their own “fancy lawyers,” Congressional and agency salaries were raised, and legislative standards tightened so that last-minute obscure language benefiting some indeterminate party could not be inserted into a bill. Leveling the playing field instead of reducing it seems a much better approach.
In the comments for an earlier post here, I had observed that the plan was probably unconstitutional.
I did have a few scattershot thoughts in response to your specific comment, though.
Truth be told, the large nonprofits and Congress itself already have access to significant analytical and legal firepower (in Congress’ case, it directly controls the Congressional Research Service and the Government Accountability Office). The large nonprofits have also proven capable of providing extensive comments during notice and comment periods. Moreover, large public interest nonprofits also have financially significant lobbying arms. For example, the lobbying component of the ACLU, American Civil Liberties Union, Inc., reports on in its 2017 IRS Form 990 that it had $149.4 million in net assets.
What nonprofit advocacy groups do not do, to my knowledge, is make direct or indirect campaign expenditures towards particular candidates. At this point, I am wondering whether this should change. Suppose people were to pool their money into a Ford Foundation type entity, which would then derive income from investment (so as to ensure a more durable financial footing and be free from government budgeting) and make campaign expenditures to advance certain political positions. It seems to me that this might be more effective–as it stands, lobbying by advocacy groups is effectively some combination of providing information and an implied threat that similarly minded voters may vote against the politician, with the latter “vote delivery” component providing some practical encouragement to adopt the advocacy group’s position. In comparison, making campaign expenditures in favor of preferred candidates seems likely (to me) to provide better “encouragement.”
With that said, fundamentally citizens are just asking politicians and civil servants to do their jobs–to listen to the facts and attempt to solve problems. But, humans are, alas, all too human.
I don’t think that a government-based public advocate is a good idea because there is a special category of speech under the First Amendment classified as government speech. When the government is the speaker, it gets to (like all other speakers) decide what gets said.
The constitutional rules of government speech mean that Congress could pass a law prohibiting the advocate from pursuing certain positions or issues at all. This is akin to rules governing civil legal services organizations receiving Legal Services Corporation funding (see https://www.lsc.gov/about-statutory-restrictions-lsc-funded-programs).
I do favor the general idea of public advocate, but it has to be one standing somewhat outside of government so that it is not dependent on government budgeting or hamstrung by government decisions about what topics are permitted.
After a drive, I had further thoughts here.
A federal public advocate should be established as a federal corporation (like Amtrak). A large one time federal endowment will be made to provide capital and the only limit to use of these funds is that they will be used in furtherance of lobbying for the public interest.
The corporation will be led by an administrator selected by the board of the corporation. The administrator serves one term of 8 years and cannot be reappointed and the term will be on the same cycle as presidential elections.
Each state, territory, and DC will be entitled to select one member of the board. Encouragement will be given to having the board members chosen by vote in each jurisdiction. (I think the Constitution would prohibit requiring this to be done.)
The board will exercise oversight over the advocate and will have an investment committee to manage the endowment. The investment committee shall act on a fiduciary basis but subject to any ethical limits on investments imposed by the entire board.
The corporation will have a privileged place in advocacy before Congress and agencies.
Finally, the advocate corporation may only accept financial contributions from individuals or from governmental entities.
I favor the idea of term limits and publicly funded elections. That would go a long ways towards weakening lobbying by special interests. Or simply outlaw lobbying by anyone other than natural persons. After all, the leaders of corporations all have a vote, and can lobby congress on their own as natural persons — why should they get two chances at it?
The Onion had the perfect solution a while back: “American People Hire Lobbyist to Represent them in Congress”
No term limits increase lobbying by special interests.
How do we know that? As far as I know, it’s never been tried. Also: see the part where I said to outlaw lobbying except for natural persons? Remove the need to raise campaign cash by having publicly funded elections?
They have been implemented at the state and local level, so this is not a theoretical observations.
Well, OK. I just learned something then. Will have to come up with some other plan… *sigh*
Admittedly anecdotal, but I have been in the situation that my elected rep was *amazing!!!* and I would happily have voted for her forever. Unless she screwed up, of course, but she never did.
Term limits mean you are getting newbie legislators every whatever years, and newbies are easy prey to lobbyists and other special interests, if not sponsored by them out of the gate.
IIRC, AOC tweeted about how the lobbyists, incl GS, had a seminar to show new congresscritters ‘the ropes’ (sorry, I do not tweet and I cannot find a search that brings that topic up, if anyone?) Takes a lot of fire in the belly to withstand that kind of wooing.
Publicly funded elections, maybe hard to do, what is the threshold for funding? Could Jill Stein’s Green Party get funding? The Marijuana Now party? The United States Pirate Party? The American Freedom Party? But yeah, public funding plus rigorous and rigorously enforced revolving-door laws, would stop congresscritters, hopefully political appointees too, from cashing in after a ‘decent interval’. BTW, ‘revolving door’ prohibitions should work both directions — you come from GoldSachs, Monsanto, whatever, you probably shouldn’t. If you do, you don’t go right back. That’s not ‘serving your country’, that is a secondment. So, how about 5 years before you can go back, if that’s where you came from?
A bit about US congressional seniority and committee assignments.
Once upon a time, congressional committee chairs and senior leaders were assigned by longevity in Congress, how often your constituency returned you to your seat. The greater your seniority based on elections and local support, the higher your committes seats and clout in Congress. That lastest until….the 1990s.
We are here to let you in on a dirty secret in Washington: To serve on the most influential committees
in the U.S. House of Representatives, lawmakers are expected to raise a certain amount of money for
their respective political parties. The sums involved have become astronomical — more than one million
dollars for the most coveted spots. And neither party can claim the moral high ground: Democrats and
Republicans alike expect this of their members.
You should not have to buy a position on any committee in Congress. That’s just wrong. To be a
successful politician, you should not be judged solely by how much money you can raise. Issue One’s
“The Price of Power” report illustrates just how rampant such pay-to-play politicking has become, and it
offers solutions so that those serving in Congress can prioritize legislating instead of fundraising.
This began in the 1990s -first by the GOP and then by the Dems – like so much else in our ‘financialized’ country.
It’s become known as “dialing for dollars” (replacing constituency service as the route to re-election and rising seniority). I don’t remember Sam Irvin or Barbara Jordan or Nancy Kassebaum or Howard Baker, etc, being put through the ignominy of ‘buying’ their seniority. Chairmanships are now based not on seniority by having long term support of one’s voters; chairmanships are doled out based on how much money one raises. Explains a lot, I think, including the rising power of lobbie$t$.
What’s needed are Constitutional Amendments that:
clarifies that only living people have unalienable rights of any kind;
Corporate and other entities of legal fiction are subordinate to living persons in any and all respects; and,
money is not speech, and is subject to regulation to dissipate the accumulation of political power by the wealthy individuals and corporate entities.
I’m no lawyer, but these things need to happen (if its not already too late).
I think money is not speech is the best way to go.
Organizations, including corporations, are a useful way for people to aggregate resources to accomplish socially useful ends (e.g., the organizations we know as Public Citizen and the ACLU are each a pair of corporations). If organizations are denied First Amendment rights, then government can pick and choose which organizations can lobby it. For example, Congress could then allow only tax paying entities to lobby, ending public interest advocacy in one move.
Agreed. And it may be a better solution than the one I was contemplating, which is a ban on anyone being paid to lobby Congress. This would preserve the right of ordinary citizens to pay their own way to DC and make their case. But I suppose it would run afoul of the idea that paying someone else to do so falls under the guarantee of free speech.
By the way, over the years I’ve seen maybe a couple of instances of the media covering the sheer volume of lobbyists in Washington — including long lines of homeless people paid to hold places for big-bucks lobbyists outside the offices of key lawmakers. If I were running a news organization, I would make this a subject of daily scrutiny.
For instance, during the Iran hostage crisis in 1980, many newspapers ran a daily front-page graphic counting the number of days the Americans were being held. Why not a daily front-page account of lobbyists swarming Capitol Hill and various agencies? On TV, it could be like weather forecasts, updated by the hour.
I disagree that political proposals should be specific. It gives clear targets for opposition and legislation is messy and sometimes solution-discovering.
Instead I would propose a set of criteria for what is acceptable and a mechanism for evaluation as the process proceeds; for example, a promise to publicly compare then current proposals/legislation, point by point, with the promised criteria.
That would free the candidate to focus on the broader issues that impinge closely on people’s daily lives. A spelling out of the effect of student debt in the lives of young adults, for example, ending with, “I will fix that and report back to you what is being done about it.”
And it would avoid the useless haggling over details among candidates who basically agree.
I agree with this. First I think by Warren saying she “has a plan”, what she is also saying is Bernie does not. This is why neo-liberals can learn to like her more easily than Bernie.
But Kennedy did not have a plan for the moon landing, he just had the goal because he felt it was important. Knowing there are people smarter tan you is important in leadership roles. Warren would probably burn out as president for that reason, she would want her hands in everything.
I disagree. In quite a few areas, even criteria would not be specific enough.
Obama promised health care reform. Look at what we got. The only group that unambiguously benefited were those who got health care via Medicare expansion, and then you had to be lucky enough to be in the right states. A lot of employers cut workers to part time to avoid the Obamacare mandate (this is not right wing urban legend, I know people personally to whom this happened). And we have the tax on your time for those not on employers of shopping for plans annually.
Now, candidates mean radically different things when they say “Medicare for All”. And when they talk about “strengthening Social Security” they often talk about sustainability, which means cuts to make it fiscally more sustainable in the eyes of budget hawks.
Warren’s plan for lobbyists was a lot of stage-setting and only a few substantive proposals.
Just a quick note to mention I’m pretty sure the tax applies to 501c6 trade groups (like the US Chamber) but not to 501c3/4 nonprofits (like Public Citizen, where I work). Having difficulty excavating the original text but that’s how it’s described here https://www.vox.com/2019/10/2/20893854/elizabeth-warrens-anti-corruption-lobbying-tax
The problem is under the expanded version of lobbying, 501(c)4s would be subject to tax. I know that people at Public Citizen had many meetings with the Trump Administration on NAFTA, for instance. I should have mentioned that specifically, that her plan would override the not-for-profit status of certain not for profits.
This gets at a related problem with how influence in Congress works as well. Just as it’s not true that regulators would be fighting for the little guy but for lobbying, it’s also true that members of Congress get into that position because of relationships they’ve cultivated earlier on in their career. They are not blank slates who could either be a crusading warrior for the downtrodden or a protector of vested interests. They get into Congress precisely because they’ve already decided which they are going to be and for most of them it is the latter.
The actual donation seals the deal, but I suspect most of them are taking the money because that’s how you establish what your priorities will be and not because that will determine where they will come down on a given issue. Even if the amount of donations/dark money at play on either side of the issue were equal I don’t think you could turn Steve Scalise into an anti-oil activist or get Cory Booker to endorse BDS.
This was spectacular info, Yves. Thank you. I like Warren too, because she is well informed and very smart. I even like her attitude about business and corporations… to a certain extent. But she’ll never make a good basketball player because she’s always dropping the ball. It’s good for a politician to be able to hedge – they all do it. But we face an almost political-existential crisis these days. Liz will never win unless she can create a different viewpoint altogether. We need to stop focusing (for now) on what we don’t want (corporations avoiding taxes for eq.) and focus intently on what we do want. Bernie does this best; I wish she could take a few pointers from him. We need a shakedown really. If we could simply (ha) establish what we do want at a grassroots level and make it the political platform it would be a good guidepost for debate of significance. Instead we waffle all over the place. I’d like to hear not about tax justice so much as what we want to do to improve society. How we might invest those (unnecessary) tax dollars. I’d like to hear about solutions that directly and immediately benefit the 99. We are getting very little of that from Liz. Here’s the question: How can we ever make appropriate long term changes if we don’t know what we want? Specifically. Because it might turn out that what we want is achievable more easily than “the corporations” think. We might actually all agree on a few things if the grassroots is listened to for social goals and if the corporations are given doable guidelines. Turning banks into utilities is a good start for finance. And Richard Murphy’s Carbon Bankruptcy is another. End the nonsense and start making the economy realistic on all levels.
As I see it, and I am a foreigner so not so conversant with the fine points, the problem is not so much that lobbyists seek to influence legislators (they are, after all, paid to do just that), but that they succeed. Perhaps the result, rather than the proximate cause, should be controlled? Perhaps legislators should have publicly funded campaigns, so they are not so reliant on donations, or perhaps the emoluments clause could be extended to all government officials, elected or not? Including after office. Wasn’t there some revolving-door prohibition, or was that just somebody’s campaign promise?
Thanks very much for this post. I like Warren. I like her “earnest, do good” efforts. (This description is meant as complimentary, not as a snark.) However…
Warren assumes that most people in Congress and at regulators are anti-corporate but are overwhelmed by lobbyists.
Ah, there lies the rub. So many academics (and Warren is an academic above all else, imo) have good thoughts, good intentions, and substitute a lot of hand-waving for rigorous analysis to get to the conclusion they hope to achieve. Warren’s plans fall down, imo, by the assumption that hand-waving is a ‘plan’, or that hand-waving substitutes for a fully examined analysis of the nitty-gritty of how things get done.
The blind spot: they cannot see their hand-waving as just that; they cannot see what they cannot see, to state a blunt tautology. Shorter: hand-waving is a tell that a fully examined analysis of the real world’s condition has not happened. It’s the equivalent of the “if only this, then that, so everyone should do ‘this’ ” suppositions of college sophomores solving the world’s problems. (Again, this is not an attack on the person; it’s an attack on the blind-spot hand-waving suppositions, and the failure to test their blind-spots against the analogue world. The assumption of correctness without any confirming testing.)
shorter: there’s a reason academia is called “the ivory tower”.
Elizabeth Warren’s many plans would reshape American capitalism Economist Oct 24 2019
Also she is on the cover this week. A grudging endorsement. They imply she couldn’t possibly accomplish a thousandth of what she proposes but the bulk of her intentions might pan out to nudges in the right direction.
“It could be that I’ve simply hit upon two of Warren’s weakest plans. But I have a sneaking suspicion not.”
Alas, you have not. Warren’s plan for 100% Clean Energy for America is also terribly, terribly weak. I won’t go into a detailed critique of it here because it would off-topic to the subject of lobbying, but the complete absence of any summarizing GW and GWh numbers for new power generation and energy storage assets is a giant red flag. There isn’t even a description of what energy storage technologies would be used.
Fundamentally, she wants to spend $3 trillion over ten years on some zero-emission stuff and assumes that (somehow, magically) we’ll get to 100% zero emissions by the time the spending is done. These kinds of “plans” cause me to despair.